Module 2

Business Research
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MODULE 2 VTU Syllabus

Business Research: An overview - Research process, problem formulation, management problem v/s. research problem, Steps involved in preparing business research plan/proposal (4 Hours)

Marketing Research
Marketing research is a systematic and objective study of problems pertaining to the marketing of goods & services.
Marketing research is the systematic and objective identification, collection, analysis, dissemination, and use of information for the purpose of assisting management in decision making related to the identification and solutions of problems and opportunities in marketing (Naresh Malhotra)
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The importance of Information

Research needs of Organisations Marketing environment Competitors Customer needs and wants Strategic decision making

Evolution of marketing research

Production orientation Sales orientation Marketing orientation

Some commentators claim that we are now on the verge of a fourth stage, one of a personal marketing orientation. They believe that the technology is available today to market to people on an individual basis
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Purposes ( Features) of Marketing Research

1. 2. 3. 4. 5. 6. 7. Identify changes in the existing market Build up a knowledge bank Improve market awareness Reduce risk and uncertainty Support marketing mix decisions Support marketing planning and controls Improve understanding of marketing
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Purposes ( Features) of Marketing Research

8. Helps you uncover opportunities in the marketplace (e.g. additional sales, new markets, etc.) 9. Can identify potential problems with your business model, product or service. 10. Provides a way for you to measure your progress over time. 11. Highlights how your product or service is differentiated from your competitors. 12. Helps you understand who your customer views as your competition. 13. Allows you to tailor offers to your customers and increase how much they buy from you. 14. Helps in planning for future purchasing/commitments for inventory.
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Marketing and Market Research

Marketing research - is the gathering of information on all activities of marketing Market research - is the gathering of information on a particular market for a product or service Marketing research has a wider scope than market research
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Marketing Information System

An organised way of continually gathering and analysing information from every source relevant to the organisation MIS consist of people, equipment, and procedures to gather, sort, analyse, evaluate and distribute needed information to the marketing decision makers

A MIS incorporates & combine the main aspects of marketing research into a centralised management function which will maintain a tight control on research procedures & ensure an accurate data bank of information about customers, products etc.

A MIS which can link external data with internal sources, such as sales record, customer records & competitor information will provide a strong basis for informed marketing decisions

Marketing Intelligence
An ongoing process of continuously collecting information about The industry in which it operates., Competitors moves in marketing or other functional areas, Related industries ( suppliers or substitute products) Government policies, And actions in the area of export, imports, taxation, Environmental protection, etc.
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Marketing Intelligence
Sources:
Regularly scanning newspapers Using specialised media cutting service Listening to employees Listening to intermediaries, Employing a consultant

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Marketing Intelligence Vs Marketing Research

Marketing Intelligence 1. On going process 2. Usually done in- house 3. Not meant for Immediate action 4. General purpose 5. Focus on competition Marketing Research 1. Out sourced to MR Companies 2. Action Oriented 3. Project based on information gap 4. Very specific answers to questions 5. Focus on consumers

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Few Worlds largest research companies

1. AC Nielson Corporation- Provides MR to Consumer products 2. IMS Health- Pharmaceutical & Health care industries 3. Taylor Nelson Sofres ( TNS)- Customer research, Omnibus studies, - 14 offices in India 4. On line Research- Cross tab
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AC Nielson Corporation

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IMS

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TNS

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Cross-tab

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Mu Sigma

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Market Equations

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Fractal

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Marketing research companies in India

Delphi research services Banknet India Direct India ORG-Marg Gallup MBA

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Applications of MR
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Strategic

Demand forecasting Sales Forecasting Segmentation studies Identification of target Markets Positioning Strategies

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Product testing, Pricing research, Consumer research promotional research, distribution & logistics research Advertising research
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Tactical

Management Problem
Problems faced by the management in an organization
Ex. Decrease in deposits in a bank Ex. Increasing cost of operation

Problem to be put in the form of question Management questions do not specify what kind of research is to be one. How to increase deposits? How to reduce the cost?

What is a Research problem?

A research problem is the situation that causes the researcher to feel apprehensive, confused and ill at ease. It is the demarcation of a problem area within a certain context involving the
WHO or WHAT, WHERE, WHEN WHY of the problem situation.

There are many problem situations that may give rise to research.

Sources contributing to problem identification

Own experience or the experience of others may be a source of problem supply. A second source could be scientific literature.
( You may read about certain findings and notice that a certain field was not covered. This could lead to a research problem. )

Theories could be a third source. Shortcomings in theories could be researched.

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Examples for Research problems

What factors are contributing to the banks failure to achieve stronger growth rate in deposits? How well is the bank doing regarding work climate, efficiency of operations compared to industry norms, financial conditions and competitors?

When to do Marketing Research?

When there is an information gap which can be filled by doing research The cost of filling the gap through MR is less than the cost of taking wrong decision without doing the research The time taken for the research does not delay decision making beyond reasonable limits When you are weighing alternatives. When there is conflict in the organization about which direction to take.
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When to do Marketing Research?

When you detect symptoms of problems from your customer base. When you embark on something different, such as new products or new advertising campaigns. When there is a clear understanding about the purpose and objectives of the study.

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Limitations of Marketing research

1. Not the only input for decision making 2. Small companies may not be interested in MR

Sales Guys

Money

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Types of Business research

1. Market research - information about the market for a given product/service Likely demand Market characteristics & trends Market share 2. Marketing research
Promotion research Effects of advertising on sales Effectiveness of promotion methods/media;
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 Concept Research Developing concept (concept development from brainstorming sessions) For testing the concept Product research covers information about the proposed/improved product: -competing products -customer acceptance -test marketing of potential new users
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Distribution research -location & design of distribution centre -costs of transportation/storage

Price research - customer perception of price/quality/value/profit margin

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On line research
Qualitative research is possible on the net in the form of chat sessions. Transcripts are available immediately. Video recording will help to capture facial expressions Reasonable length of online survey should be about 10-20 minutes. Forms of Online research E- mail surveys Fastest & simplest Little setup time & wide reach Limited to flat text format & can not include complex questions, graphics Can address only those who have email ID

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 HTML Forms Can create more complex form of questions, grid scale rating questions with graphics & sound. Setup required is high. Respondents are invited through E-mail & given a web site address where the questionnaire can be found. & answered. Lot of programming effort is required.
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Disadvantages of online survey

Sampling is difficult Selection Bias. Only the internet users can be the target population for the research work.

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Data Ware Housing & Data mining

Involves the capture of data on a regular basis from several sources. Data is stored on computers in virtual ware house & used to do the research work. This information can be used for marketing actions such as specially designed promotions. Ex. Credit card may store card usage data over many years. This can be used to build profile of frequent buyers, High value buyers, customer relationship management.
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Steps in research process

Formulating the research problem Extensive literature survey Development of working hypothesis Preparing the research design Determining sample size Collection of data Analysis of the data Hypothesis testing Generalisation & interpretation Preparation of the report
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Marketing research process

Define the problem Development of an approach to the problem Research design formulation Analysing the data Field work or data collection Data preparation & Analysis Research Preparation & Presentation

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Step 1-Define the problem

Define the problem Researcher should take into account the purpose of the study, relevant background information, the information needed. Involves discussion with the decision makers, interview with industry experts, analysis of secondary data & qualitative research.
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Steps to be followed for defining the Problem

Statement of problem in a general way Researcher must immerse thoroughly in the subject matter. Pilot survey: It is a preliminary survey conducted in social research normally in the form of field observation.
Helps the researcher to state the problem in a general way.
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Pilot survey
Is essentially a small scale replica of the actual survey Carried out before the actual survey is undertaken. Very useful when the actual survey is to be on a big scale as it may provide data which will allow costs to be trimmed. Will give an estimate of the non-response rate and it will also give a guide to chose the sample size.
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Understanding of the nature of problem

Discussion with the experts Surveying the available literature Developing the ideas through discussions New ideas will emerge through discussions. Discuss the problem with his colleagues or top managers or professional staff or employees who have experience in the area.

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Experience Survey
Usually done through an informal, free-flowing conversation with anyone who has knowledge in the area.
Referred to as an experience survey.

Only meant to help formulate the problem and clarify concepts. Respondents are knowledgeable, articulate and thoughtful individuals.

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Omnibus Survey
Is a method of quantitative marketing research where data on a wide variety of subjects is collected during the same interview. Usually, multiple research clients will provide proprietary content for the survey, while sharing the common demographic data collected from each respondent. Advantages to the research client include
Cost savings Timeliness

Generally uses a stratified sample and can be conducted either by mail, telephone, or internet

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Rephrasing the research problem

The problem has to be rephrased into a working proposition.
Ex. Why is productivity in Japan much higher than in India? General way

What factors were responsible for the higher labour productivity of Japans manufacturing industries during the decade 1971-1980 relative to Indias manufacturing industries?
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Step 2-Development of an approach to the problem

Formulation of objectives Research questions Hypothesis Identify the information needed Process is guided by discussions with the decision makers, interview with industry experts, analysis of secondary data & qualitative research.
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Step 3- Research design Formulation

IT is a frame work or blue print. It details the procedures necessary for obtaining the required information. Steps 1. Definition of the information needed 2. Secondary data analysis 3. Qualitative analysis 4. Methods of data collecting quantitative techniques 5. Measurement & scaling procedures 6. Questionnaire design 7. Sampling process & sample size 8. Plan of data analysis
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4.Field work or Data Collection

Personal interview Telephone interview Mail

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5.Data Preparation & Analysis

Editing Coding Transcription & verification of data

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6.Report preparation & presentation

To be documented in a written report

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END

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